Lynas when fully operational, is geared to capture at
least 20 per cent of global market share.

“Rare Earths” are a group of 17 elements that are
currently used in a wide array of modern technologies, ranging from hard disk
drives to lamp phosphors and hybrid car batteries. Presently, 90% of these
minerals are mined in China.

But Lynas is not the only company aiming at breaking China’s
stranglehold on this commodity which is utilised in nearly every modern
appliance from mobile phones, computer screens to colour televisions.

Companies in the U.S. are also racing to the finish
line. It’s a matter of who makes it first to the finish line, gets a leg up in
commanding prices and secures contracts from companies seeking to buy rare
earth, with competition hotting up to give China a run for its money.

In 2012, an old rare earth mine in California
reopened and the next major rare earth mine is on track for going into full
production in 2013 at Mount Weld,
Western Australia (owned and
operated by Lynas Corporation).

Because rare earth is a very precious commodity
without which, modern appliances may come to a standstill, availability of rare
earth has become a critical issue.

China's regulation on rare earths became a major political
issue in July 2010 after the country slashed domestic output and export quotas
by 40%. Recent data from Bloomberg shows that exports of rare-earth oxides from
China
have fallen 56 percent during the first five months of 2012.

According to Bloomberg,
China, the
world’s biggest rare earths supplier, cut the first-batch export quota for next
year by 27% as overseas demand for the elements waned.

China’s Ministry of Commerce sets rare earth export limits
twice a year. It pegged the first allotment for 2013 at 15,501 tonnes, down
from 21,226 tonnes for 2012’s first setting.

Most affected by this limit in export is Japan. On Oct
1, 2010, Japan
announced that it will move up developing new materials that can replace rare
earth minerals in order to get rid of its dependence on Chinese exports. At the
same time, Japan also sought
to increase its supply by mining the precious minerals in more foreign
countries, outside of China.

In H1 of 2012, Japan
imported 3,007 tonnes of rare earth minerals from China, which accounted for 49.3% of
its total volume, marking the first drop to below 50%.

In 2011, Japan ’s imports of the metals fell
to 15,400 tonnes, down 34% compared with the figure of the previous year.
Before 2009, over 90% of Japan's
rare earth supply came from China
. According to Nikkei , Japan currently owns 16,500 tonnes of rare earth
metal resources in Australia
, Kazakhstan , India and Vietnam . These resources will be
available to Japan
in 2013.

What does it mean for Malaysia? Its timely entry into the
Rare Earth Industry means that the country, which aims to be developed by 2020,
stands to benefit immensely from better paid high skilled jobs and an equal
footing for local businesses to make their first step into the global
manufacturing arena.

The World Bank warned Malaysia back in 2009 that it is
too dependent on revenues from oil and gas and should instead broaden its
revenue base.

Professor Badrulhisham Abdul Aziz, a Malaysian
academic at University Malaysia Pahang, said: “With the Lynas refinery, Malaysia has
the potential to brand itself as a rare earth hub, once other downstream
industries place their plants here.”

The demand for rare earths is likely to grow
dramatically in coming years and Malaysia can play an important role
in leading the way in showcasing how a modern processing facility can be
effectively managed to minimize risks.

The rare earth industry within Malaysia has been the focus of intense political
scrutiny, social activism and media interest during the past two years, in
light of the Malaysian Government's approval of the construction and operation
of a US$1 billion rare earths processing and refinery plant at Kuantan in PahangState.
This facility is owned by Australian corporation Lynas and commonly referred to
as the “Lynas Advanced Materials Plant” (LAMP).

Malaysians should decide if they want to vault into
the new economic era where it has a lead now in rare earth or remain frightened
into economic submission via unsubstantiated claims of rare earth radiation,
which has been disproved by the United Nations’ International Atomic Energy Agency.

More recently, the United Nations Scientific
Committee on the Effects of Atomic Radiation concluded that radiation doses of
less than 0.1 Sv or 100 mSv, have only a negligible effect on health.

Lynas has declared that radiation levels from its
plants are at 0.002 mSv , way below smoking which generates radiation of 150mSv.